XI. Carnegie and Other Sultans of Steel
started off as a poor boy in a bad job, but by working hard, assuming
responsibility, and charming influential people, he worked his way up to wealth.
He started in the Pittsburgh area, but he was not a man who liked trusts; still, by 1900, he was
producing 1/4 of the nation’s Bessemer steel, and getting $25 million a year.
J. Pierpont Morgan
, having already made a fortune in the banking industry and in Wall Street, was
ready to step into the steel tubing industry, but Carnegie threatened to ruin him, so after some tense
negotiation, Morgan bought Carnegie’s entire business at $400 million (this was before income tax). But
Carnegie, fearing ridicule for possessing so much money, spent the rest of his life donating $350 million of
it to charity, pensions, and libraries.
Meanwhile, Morgan took Carnegie’s holdings, added others, and launched the
in 1901, a company that became the world’s first billion-dollar corporation (it was
capitalized at $1.4 billion).
XII. Rockefeller Grows an American Beauty Rose
In 1859, a man named Drake first used oil to get money, and by the 1870s, kerosene, a type of oil,
was used to light lamps all over the nation.
However, by 1885, 250,000 of Edison’s electric light bulbs were in use, and the electric industry
soon rendered kerosene obsolete, just as kerosene had made whale oil obsolete.
Oil, however, was just beginning with the gasoline-burning internal combustion engine.
John D. Rockefeller
, ruthless and merciless, organized the
Standard Oil Company
of Ohio in
1882 (five years earlier, he had already controlled 95% of all the oil refineries in the country).
Rockefeller crushed weaker competitors—part of the natural process according to him—but his
company did produce superior oil at a cheaper price.
Other trusts, which also generally made better products at cheaper prices, emerged, such as the
meat industry of
Gustavus F. Swift
XIII. The Gospel of Wealth
Many of the newly rich had worked from poverty to wealth, and thus felt that some people in the
world were destined to become rich and then help society with their money. This was the “
” applied Charles Darwin’s survival-of-the-fittest theories to business. It said the
reason a Carnegie was at the top of the steel industry was that he was most fit to run such a business.